4 actions to finance your retirement

Stepping into hot broth at exactly the right time is a lot of fun. The point is, however, that stock picking should be a relatively boring affair for most of us most of the time. Investors are generally best served by finding quality names and allowing time to do the hard work.

That’s not to say investors should be limited to growth or value. Likewise, a winning portfolio typically consists of dividend-paying stocks as well as stocks of companies that reinvest every portion of their earnings into their own growth. Above all, quality is the key.

To that end, here’s a look at four quality names that investors looking to build a retirement nest egg should consider. They are all quite different from each other, but in all four cases, these stocks could be considered the best choices within their respective industries.

Image source: Getty Images.

Edison International is built to last

Edison International (NYSE: EIX) is one of those boring utility companies, although there is nothing boring about the fact that it has increased its dividend for 16 consecutive years now. The current 4% yield isn’t too bad either.

And Edison International is truly an international piece. While American consumers are most likely familiar with the company through its Southern California Edison, its Edison Energy arm also does business through partnerships in Europe, South America and Australia. This combination helped mitigate any earnings volatility the company might otherwise have experienced.

The most exciting aspect of Edison International, however, is not its history or its dividend yield, but its future. The company is preparing for the inevitable changes to come for the utility industry. In August, Southern California Edison received approval to install 38,000 electric vehicle chargers. And before the coronavirus pandemic takes hold, the utility has signed agreements that will add 770 megawatts of battery-powered energy storage that is needed to use renewable energy sources like solar and wind power.

Be a logistics lessor with Prologis

Prologis (NYSE: PLD) possibly one of the biggest companies that few people have ever heard of. The $ 74 billion equipment is an industrial real estate investment trust, or REIT, specializing in logistics. In other words, the REIT’s tenant base is heavily involved in Shipping and delivery; most of the 976 million square feet of space it rents is used as distribution centers.

This model might seem like a frightening proposition as long as COVID-19 (and its Economic impact) is at stake. But that’s not necessarily the way it is. Among the largest tenants of Prologis are Amazon, FedEx, and United parcel service. Not only are these companies going nowhere, but the pandemic has also bolstered their respective businesses. This is largely the reason why the company’s occupancy rate at the end of the third quarter was still strong at 95.6%,

However, Prologis is not just a dividend payer which is currently earning 2.3% with no prospect of growth. While the contagion has slowed its ability to do so, the REIT is still on the hunt for new properties to buy and then rent.

Microsoft continues to adapt to the cloud

Income-conscious investors won’t be happy with the 1% return Microsoft (NASDAQ: MSFT) is able to offer newcomers now. And investors who rely on significantly higher dividends from the software giant for the foreseeable future are going to be sorely disappointed.

What this company lacks in terms of payment potential, however, more than makes up for it in terms of the marketability of its products. It’s still the number one name in office productivity software, with cloud-based offerings like Office 365 driving revenue up 21% year-over-year in the quarter that ended in September.

Yes, home orders have helped boost some of these new cloud-based businesses. Microsoft’s longer-term revenue trend, however, reveals that the company was already moving in this direction before the pandemic. Its Azure interface for managing cloud computing hardware is proving to be extremely popular among enterprise customers, resulting in a 48% improvement in the server products and cloud services business of the last quarter.

And these are just a few of the most remarkable growth drivers. The company is also boosting its online team management tools, strengthening how it can help small businesses promote themselves on the web and creating a subscription-based ecosystem around their businesses. Xbox franchise Just to name a few. These are projects that not only have a lifespan of several years (and possibly decades), but they are also business models that generate recurring revenue.

Alphabet keeps its competitors at bay

Finally, add Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG) to your list of actions that will help you build up a retirement nest egg.

If you need the income right now, forget it. Alphabet does not pay a dividend, and it seems unlikely that it will in the future. It’s all about growth with this company. But what growth! The last trimester turnover increased by 13% year on year and over 15% at constant exchange rates, renewing a growth trend that has been in place for years. Profit growth has been a little less constant, but overall it has been much stronger over the past decade.

Skeptics will say nothing lasts forever, adding that Alphabet’s Google may be nearing its maximum reach. This position assumes that Alphabet will not find new ways to connect with Internet users around the world and ignores the company’s current position in the search engine space. Global statistics from StatCounter show that Google still responds to nearly 93% of the world’s web searches, while its Android operating system is present on 73% of mobile devices globally. These figures have also remained relatively stable, despite increased competition on both fronts.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are motley! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

About Shirley Hudson

Check Also

I have a credit score of 550, what are my car buying options?

Dealing with bad credit isn’t easy, and it can be even harder when you need …

Leave a Reply

Your email address will not be published.